Tax credit for fertility treatments expanded, made retroactive for 10 years

Many Canadians who have turned to assisted reproductive technologies over the past 10 years are now eligible for a tax break as a result of Finance Minister Bill Morneau’s new budget.

Getting medical help to conceive a child can cost thousands of dollars, a cost that isn’t covered by most provincial health plans.

The government estimates that one in eight Canadian couples experience infertility and “an increasing number of Canadians, including single parents and same-sex couples, are turning to assisted human reproduction procedures to help build their families.”

Until now, Canadians had to be diagnosed as medically infertile to be able to claim the cost of reproductive technologies as part of their medical expense tax credit.

The change in Wednesday’s budget opens the tax credit to those who aren’t infertile, such as single women who want to have a child or a same-sex couple who want to start a family.

Tax change retroactive

Moreover, the way the government has decided to proceed means the measure will also effectively be retroactive. By framing it as a clarification of the tax laws, it means that anyone who has incurred expenses over the past 10 years for reproductive technologies such as in vitro fertilization can refile their taxes for that year and claim the expense.

The government says it could eventually make the expenses associated with turning to a surrogate mother eligible as well, but wants to first wait for the results of a consultation launched by Health Canada to determine which expenses should be considered eligible.

Government officials say they have no idea how much the measure will cost. They say they don’t know of cases where someone’s expense was denied, but they also don’t know if people didn’t claim the expense because they weren’t medically infertile and didn’t believe they were eligible.

Dr. Jeff Roberts, president of the Canadian Fertility and Andrology Society, says an estimated 10,000 people turn to assisted human reproduction technologies in Canada each year, roughly 80 per cent of whom have been trying to conceive for at least a year and meet the definition of infertility.

Expensive procedures

Most provinces do not cover the costs of in vitro and other fertility treatments, so tax breaks make a big difference for those seeking treatment, he said. A single cycle of IVF can cost between $10,000 and $15,000.

“Anything is a help, because I see patients all day long who need treatments like IVF and just simply can’t afford them.”

However, Aaron Wudrick of the Canadian Taxpayers Federation questioned the wisdom of allowing people to retroactively claim the expense.

“Anytime you go retroactively, you’re opening up Pandora’s box. I think that’s probably not a good idea, especially if they have absolutely no estimate of what the cost would be,” he said.

Aaron Wudrick with the Canadian Taxpayers Federation questions whether the deduction should be retroactive. (CBC)

“If you’re going to implement such a measure, it should be forward looking. If you’re going to even think about something being retroactive, they have to have some cost estimate. Otherwise they are opening themselves up to considerable fiscal abuse there.”

Allowing an expense to be claimed retroactively also runs counter to the purpose of tax credits, said Wudrick.

“These credits are supposed to help people who might not otherwise be able to do something. If they are already doing it, doing it anyway, and you’re just giving them a windfall, you’re not really achieving the objective of the credit.”

Tax code doesn’t discriminate

Former Conservative cabinet minister James Moore said it was unusual for a government to allow people to claim expenses that have been made years ago.

“It’s pretty rare to have a 10-year window, a retroactive window going back, for expenses that have already occurred,” he said.

“So, I think what that signals is that the government doesn’t expect this to be a big ticket item in terms of the costs that have been incurred so far.”

A single cycle of in vitro fertilization can cost $10,000 to $15,000. (Dr. Thomas Hannam)

With women waiting until they are older to start families, the measure is a reasonable one, said Moore. He dismissed possible objections by those who may not support tax help for same-sex couples to have children.

“I suppose they are free to express their views, but in this country the charter of rights is very clear — all Canadians are treated equally under the law, and we don’t discriminate in the tax code based on your sexual preference. If people want to start a family, they are entitled to start a family and the tax credit would apply equally to all Canadians.”